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Settlement Would Extend Gas Choice to Customers at Kokomo Gas, Northern Indiana Fuel & Light
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March 7, 2011
Retail gas suppliers could begin serving customers in what are currently the Kokomo Gas and Fuel and the Northern Indiana Fuel and Light Company Inc. territories in Indiana within two months as the operating companies are merged into affiliate Northern Indiana Public Service Company and opened to choice, under a settlement filed with the Indiana Utility Regulatory Commission (Cause No. 43941 et. al.).
The proposed extension of choice to customers in the affiliates to be merged was first reported by Matters (see 10/18).
The settlement would allow NIPSCO to implement across its entire new footprint rates, tariffs, rules, and regulations identical to those that were implemented in the recent NIPSCO Gas Rate Case, including those terms with respect to Choice and transportation service. NIPSCO would also be allowed to offer its optional Price Protection Service (PPS, fixed/capped rate) and DependaBill (flat bill) options to the combined service areas as well (referred to as non-GCA services).
Under the settlement, the merger would take effect on the later of May 1, 2011 or the first day of the second calendar month following approval of the settlement by the IURC. Competitive suppliers will be free to start marketing to customers in the merged territory on the merger's effective date. NIPSCO, in coordination with the IURC, consumer counsel, and marketers, will engage in customer outreach and education regarding the merger, including the newly available service options such as choice.
A single Gas Cost Adjustment (GCA), modified quarterly, would be implemented for the entire merged service areas. NIPSCO’s consolidated distribution system would be divided into five delivery zones (Northwest, Southeast, East, Northeast, and South) for purposes of accommodating delivery of gas associated with transportation service and service under NIPSCO’s Choice and Alternative Regulatory Plan (ARP) services.
Under the settlement, NIPSCO has agreed to the incorporate an additional delivery option for Choice marketers, consistent with that presently applicable to PPS and DependaBill, whereby the marketer has the option to bring in a flat volumetric amount per day per calendar month as specified by NIPSCO. Any over or under deliveries would be reconciled as they are currently for the other options, and marketers that choose this option would be required to mitigate their allocated portion of storage and transport consistent with the current mitigation program. This option shall be implemented before or during the renewal of the ARP as established in Cause No. 43837. In Cause No. 43837, the ARP was extended through the first quarter of 2012 (see Matters, 4/7).
Additionally, NIPSCO has agreed to implement steps necessary to provide for access to customer information systems and billing records by non-GCA services and marketers on a non-discriminatory basis no later than the effective date of the successor to the ARP under Cause No. 43837.
NIPSCO would also incorporate the Choice program into its gas tariff without a stated term of years or sunset date during the renewal of the ARP under Cause No. 43837.
The settlement further provides that NIPSCO shall maintain transparent records that identify and appropriately allocate costs between GCA services and non-GCA services with sufficient specificity and clarity to confirm the proper allocation of costs such that non-GCA services are not under-allocated expenses, no later than the effective date of the successor to the ARP under Cause No. 43837.
Settling parties have also agreed on a Code of Conduct to apply to NIPSCO. Notable provisions include:
• In connection with the marketing and promotion of non-GCA services, the utility shall not selectively target customers currently being served by marketers enrolled under the Choice program.
• In connection with the solicitation and enrollment of customers for non-GCA services, the utility and any affiliate providing such services shall comply with the same terms and conditions to which marketers enrolled in the Choice program are bound, including specifically the terms and conditions set forth in the Supplier Code of Conduct
• The utility shall not engage in joint advertising or marketing with respect to non-GCA services and any other utility service. The utility shall not support the sale, marketing or offer of non-GCA services through bill inserts to utility customers or through postings on the utility website, unless and to the extent that the utility provides or offers such support to unaffiliated marketers and service providers on the same terms and conditions. The utility shall maintain competitive neutrality in any and all presentations or postings on its website, any bill inserts addressing supply options, competitive alternatives or non-GCA services, and any advertisements, promotional materials and public communications relating to non-GCA services.
• Any discount, rebate or incentive offered by the utility to its non-GCA services or to any utility affiliate providing such services or to any customers receiving such services shall be offered on a non-discriminatory basis to all similarly situated marketers, customers or other entities, regardless of affiliation.
• The utility shall not unreasonably discriminate in favor of its non-GCA services or any utility affiliate providing such services in matters including, but not limited to, the allocation, assignment, release or transfer of rights to intrastate or interstate transportation or storage capacity, use of utility distribution facilities, or rights to on-system or off-system storage.
The merger would dissolve the utility-affiliated marketers Northern Indiana Trading Company, Inc. and KGF Trading, Inc. Customers of such marketers would be transitioned to transportation service, if meeting volume thresholds, or placed on GCA service and given an option of Choice or a non-GCA product offered by NIPSCO.
The settlement would maintain the current NIPSCO unaccounted for gas (UAFG) rate of 1.04% and apply it to the combined territory.
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